India Retail Report Synopsis

Backgrounder: The India Retail Report 2007 aptly documented 'Opportunity India Retail'; published by the IMAGES Group and released by Mr. Kamal Nath, Hon'ble Commerce & Industry minister, Govt. of India in January 2007, the research volume set benchmark figures on Indian retail, while sizing up the entire market with its key segments, scope and performance of key players across categories and formats. Under the aegis of India Retail Forum (IRF), for the first time, the entire retail industry and some of the worlds top global research & consulting firms came together for a detailed study of the Indian retail industry. The book, which became a best seller across all titles of books in major book chains, also carried detailed analytical articles by 40 thought leaders from the industry and the government. While the hard copies became must-haves for every CEO connected with Indian retail, the CD version with navigation facility, tables, graphs, pictures of hundreds of stores and shopping centres emerged as the most user-friendly tool for top level executives for use in corporate PPTs. Copies of the book were ordered from possibly every corner of the world -- reflecting IMAGES' capability of spreading the India retail story across the globe. The past eighteen months have seen plenty of action in Indian retail; it is the right time to update the retail world with the new edition of India Retail Report. Supported by Confederation of Indian Industry (CII), Shopping Centres Association of India (SCAI) and Retailers Association of India (RAI), the India Retail Forum saw the release of this most sought after report in the presence world retail captains, corporate majors and policy makers of India and the entire retail fraternity. This year, many more organisations including National Council for Applied Economic Research (NCAER), Indian Council of Research in International Economic Relations (ICRIER), and International Food Policy Research Institute (IFPRI) have contributed well researched chapters. 550 hardbound pages of extensively researched content, the new edition, presents the India retail story in all its colours. Quantifying consumer spending and modern retail share in all consumption categories -- from food to fashion; telecom to automobiles; consumer durables to health & wellness, entertainment & leisure -- India Retail Report 2009 is an ultimate guide to the business of

retail in India. Chapters pertaining to the investment climate, retail profitability and legal issues have been especially put together by industry experts -- to enable potential investors in taking informed decisions. As per the India Retail Report the Indian retail market stood at Rs.1,330,000 crore in 2007 with an annual estimated growth of about 10.8 per cent. Of this, the share of organised retail in 2007 was estimated to be only 5.9 per cent, which was Rs.78,300 crore. Nevertheless, this modern retail segment grew at the rate of 42.4 per cent in 2007, and is expected to maintain a faster growth rate over the next three years, especially in view of the fact that major global players and Indian corporate houses are seen entering the fray in a big way. Even at the going rate, organised retail is expected to touch Rs.2,30,000 cr (at constant prices) by 2010, constituting roughly 13 per cent of the total retail market. Quotes: The India Retail Report 2009 is a well researched and professionally presented document that brings forth several opportunities that could benefit the Indian consumers. I look forward to the Indian retail sector continuing on its developmental growth path and spreading its benefit to all. Kamal Nath, Indias minister for Commerce & Industry. "Many countries specially in south east Asia like Malaysia, Indonesia and Thailand have put in place regulations with a view to balance the conflicts of interests between modern retail and the traditional retailers and suppliers to modern retail. We hope to achieve the best interests of the Indian business through sustained efforts in this direction to make Indian retail truly competitive with global standards." Ajay Shankar, secretary, DIPP, Ministry of Commerce & Industry. "Retailers must play a wider role in society.The traditional retailer was in many countries, an active part of the social structure of the neighbourhood. More than just a source of products or services, he was a companion, friend, advisor, source of news etc. Most modern formats do not permit such personalised interaction. However, it is important that we recognise and play our role in maintaining our neighbourhoods, preserving the environment, assisting in municipal planning and development, and playing multiple roles as good citizens. Its not just good social behavior, its

good business too!." Amitabh Taneja, Chairman, IMAGES Group and chief convenor, IRF. For retail to be modernized and contribute significantly to the consumption economy of the country, we have to involve the government and the society at large as stakeholders in the business. Unlike the IT boom in the eighties which happened without government intervention, retail development has to be an integral part of the state and central governments India strategy. B S Nagesh, Chairman, Retailers Association of India and MD, Shoppers Stop Limited. The need of the hour is to sensitize all our stakeholders to the transformation that modern retail can bring in to our country. We need to develop a collaborative platform among retailers and other stakeholders that facilitates further growth of the sector. And as retailers, we need to focus on how to bring about market innovations that spur consumption and create an inclusive model that brings more consumers into the fold of modern retail. Kishore Biyani, Chairman, CII Committee on Retail and Founder & CEO, Future Group. HP to upgrade Subhikshas IT infrastructure 11 Sep, 2008 HP Financial Services, the asset management services and leasing subsidiary of US-based IT conglomerate HP, has announced that it will partner Indias largest supermarket chain Subhiksha to develop software to support the latters financing and asset management services. Elaborating this development, Irv Rothman, president and chief executive officer, HP Financial Services, said, India is a critical market for us and building a strong relationship with leading companies like Subhiksha is key to our growth strategy in Asia.

R Subramanian, managing director, Subhiksha, confirmed the news and said, We have been working closely with HP over the last two years and we are happy with this new development as, from now on, we will be able to invest more effectively in our business growth. In this new plan, along with deploying SAP business enterprise software for Subhiksha, HP will provide desktop PCs and other IT equipment on lease to Subhiksha and refresh its older PCs with new technology.

Subhiksha head honcho is IRF08 chair 30 Aug, 2008 India Retail Forum (IRF), arguably the countrys largest congregation of retail minds, has a new chairman on board. The Forum, for the year 2008, will see R Subramaniam, the managing director of Subhiksha, control its reins. Handing over the charges to Subramaniam, V Vaidyanathan, executive director of ICICI Bank and the chairman of IRF 07, said, My last duty as Chairman of Indian Retail Forum 2007 is to hand over the reins to a representative of the industry who will lift the Forum to greater heights. It is my proud privilege to welcome Mr R Subramanian, as the Chairman of IRF'08. Mr Subramanian has kindly accepted the mandate of his industry counterparts, and will chair the 2008 edition of the magnum opus of Indian retail, where the retail world comes together to understand and explore the world's most lucrative retail market. As per the IRF, the decision was taken in sync with the views and choices of the entire industry. After getting the views of over 250 industry captains, one name stood out. When Mr Subramaniam was nominated by Bijou Kurien, president and CEO, Reliance Lifestyle Holdings, and seconded jointly by Sanjiv Goenka, vice chairman, RPG Group and Mr. B S Nagesh, MD, Shopper's Stop, the opinion of the industry leaders became clear, informs Vaidyanathan. Inviting the industry to support him in his new role, Subramaniam stated, I

hope that I shall have the industrys support to make IRF '08 relevant for retailers. Let us all combine efforts to make this the magnum opus of Indian retail as no one else can better execute it than us. New Partners Meanwhile, industry bodies including the Confederation of Indian Industry (CII), Retailers Association of India (RAI) and Shopping Centre Association of India (SCAI) have joined hands with the IRF. Speaking on this partnership, Kishore Biyani, chairman, CII National Committee Retail and the founder and CEO of Future Group, said, IRFs invite to CII to partner with the largest congregation of retail minds -- offering the forum to discuss the issues with the industry at large was well timed and much appreciated. Indeed the meet will provide us a much larger and an ideal platform for a more meaningful dialogue and partnership with the industry to subsequently chart out a detailed action plan for CII initiatives in retail. The power and passion of the IMAGES team push all of us to converge at this great platform to share, learn and evolve. IRF this year has the support of all major bodies including Confederation of Indian Industry (CII), Retailers Association of India (RAI) and Shopping Centre Association of India (SCAI) and indeed IRF has emerged as the perfect platform for trade bodies and industry captains to meet, discuss and find a common agenda to work for the growth of the industry, says Subramaniam. IRF is all about sharing, learning and evolving together, and is recognised as a global standard. Mr. Subramanian is the ideal chairman to make this huge business, knowledge and networking platform even more relevant for the participants. I invite the entire retail fraternity to join me in extending all support to Mr Subramanian in making IRF '08 a huge success, Vaidyanathan stated.

Bachat Mera Adhikar - That is what Subhiksha Has For You! Spartan, Relentless, Frenzied pace By Zainab Morbiwala Hopping across to the nearest super market has ceased to be an inhibition even for an average Indian middle-class as the benefits they offer vis--vis a local kirana store are increasing by each passing day. The reasons if we evaluate are simple. With retail getting more and more organized in our country, a lot many players are recognizing the potential household products have. No wonder, retail guru Kishore Biyani has his foothold not only in the apparel and lifestyle sector with Pantaloons, but also occupies a major mind of recall with regards to the mother of all purpose stores' in India with Big Bazaar. Apna Bazaar, Sahahari Bhandar etc have been in existence since ages. Modern retail is bringing with it new players who go a step further in offering customers with additional discounts coupled with excellent service and many more product offerings. The majority of players are regional but here again the magic of retail is gradually driving players to gain a national footprint. The latest to do this is Subhiksha. Starting its journey in 1997 with a single store in South Chennai, they gradually expanded into other areas of Chennai and then the rest of Tamil Nadu. Till late last year, Subhiksha had nearly 140 odd stores in Tamil Nadu. Talking about the same, R Subramanium, managing director, Subhiksha Trading Services Ltd., says, From then on, we put together an aggressive expansion plan and when others were still talking about the benefits of retail, we had opened nearly 450 odd stores across key markets such as Delhi, Bangalore, Hyderabad, Mumbai, Ahmedabad, Baroda, Vizag and Vijaywada. Before entering the genre of super market, the people behind Subhiksha had an option of creating a niche for themselves in the software sector. Explaining why retail was chosen over IT, Subramanium says, The logic was that in 1997, we thought with most big players in software predating us by at least 10 years or more, we would be too late to enter the industry we thought we would be quite early in retail and get the same head start of 10 years. The ideology behind starting Subhiksha was based on two things to show that things could be done differently from what the rest of the world does and that we need not copy the western market and secondly to ensure that the benefits of organized retail went beyond the high end affluent consumer and went to the aam aadmi as well.

Currently, Subhiksha is expanding its operation in Maharashtra with lightening speed and the TV commercials and radio campaign are complimenting the same. Pinakiranjan Mishra, Partner, Risk and Business Solutions, E&Y says, Subhiksha has plans to set up close to 200 stores in Maharashtra in 2007, out of which about 100 would be in Mumbai. If media reports are to be believed, they have already set up about 75 stores by the first week of January. This is quite impressive by any standards and if they are able to grow at this pace, they will have a strong market presence. Apart from low prices, they also offer free home delivery and if they make this into a successful model, they have a distinct edge over others. Sharing his views on Subhiksha's entry, Atul Takle, Head Corporate Communications, Pantaloon Retail (India) Limited, We do not see Subhiksha's entry affecting us. They are largely in the food area, whereas Big Bazaar is an all purpose store with over 200,000 SKU's. A customer walking into Big Bazaar meets his expectations of good quality at great prices as well as a variety of products. Commenting on this, Mishra adds, The models of Big Bazaar and Subhiksha are quite different and so is the value proposition -- apart from the fact that they both provide convenience and value. I guess both will exist together in the immediate future as Indian still do not do bulk purchases, especially of fresh food items. So, while Subhiksha would probably score high on accessibility and convenience, Big Bazaar would score as a one stop shop with better deals. Apart from home-delivery, Subhiksha has introduced good discounts for their customers. We offer genuinely-sharp discounts and the lowest prices in town, significantly lower than those offered by Big Bazaar, Apna Bazaar etc. In fact, we offer discounts as much as 3-4 times those offered by some of these stores. Also, our discounts are not seasonal and not limited to a few products. We have many more stores in comparison to others, for instance, we operate in Delhi out of more than 110 locations and in Mumbai out of 74 locations. This is being expanded further, explains Subramanium. We prefer going the lease-rental route. The reasons are simple, we have greater control on the operations this way and given that we do not have to incur an additional margin to the franchisee, we manage to keep our costs low. This in turn enables us to offer truly low prices to our customers, he further adds.

Operating in four verticals fruits and vegetables, pharmaceuticals, FMCG and telecom -- the mode of operation at Subhiksha is minus any frills and for obvious reasons as the aim is to offer good discounts. Elaborating on discount retailing, Subramanium says, We feel strongly about bringing true value to customers through discount retailing. There are lots of retailers who claim to offer discounts. But the moments you look behind the surface, you will realize that offering discounts and true value to customers is restricted to promise of low prices on one particular day or festival days. More over the promise of large discounts is restricted to at best 10 per cent of the merchandise. Rest of the things actually sells at very close to MRPs. So the customer is actually misled into believing that she is getting large discounts whereas she may be actually getting at best an average discount of 2-3 per cent. In true discount retailing, the customer must be offered deep discounts and genuinely low prices that enable them to save money. Also, the discounts must not be restricted to specific days or specific items. Subhiksha follows the EDLP (every day low price) approach where we actually offer the lowest prices every single day of the year on everything that is sold from our stores. Talking about the no-frill, no-glamour mode working for Subhiksha, Subramanium says, Customers are extremely smart. They go to the glamorous options like hypermarts and malls far away from their houses for entertainment once in a while. For day to day buying of household provisions, groceries, toiletries, medicines, fruits and vegetables, etc they still prefer to go close to their houses or order on the phone. With time at so much of a premium, buying the same soap, the same detergent or refined oil, is an activity that most individuals want to spend less time on. They would rather spend time on more pleasurable activities. Who, in any case, is looking for ambience to buy the same old toothbrush or toothpaste? Therefore, no-frills stores such as ours that offer the same basics do very well. With over a million sq.ft in space across the country, the minimum size for a Subhiksha store is 1,500-2,000 sq.ft. Scouting for a suitable property is a known nightmare but for Subhiksha it has been a smooth journey so far. Subramanian says, So far, we have not had any serious issues. Our stores are located in neighborhoods where finding space is not as much a constraint. We base our search on finding the right size (1,500 2,000 sq.ft) properties close to where our target customer catchments are, those that are available on a long-term lease. To further ease the cost, Subhiksha has opted for lease-rental route. Talking in length about their expansion plans which happen to be noteworthy, Subramanium shares, In the first phase of our expansion we have invested

nearly Rs.300 crore and now have over Rs.450 crore. These include over 100 stores in Delhi, 40 stores in Bangalore, 30 stores in Hyderabad, 30 stores in Ahmedabad, 14 stores each in Vizag and Baroda, 74 stores in Mumbai and many stores in the rest of Andhra Pradesh, Gujarat, Karnataka, Tamil Nadu etc. In our second phase of expansion we will be investing an additional Rs.200 crore and expand into Punjab, Haryana, Western Uttar Pradesh, Maharashtra and West Bengal among other states. We plan to open an additional 500 stores by the end of 2007, making the Subhiksha chain over a 1,000 store strong. ICICI venture is the financial partner and the banks are UTI Bank, HSBC Standard Chartered, HDFC Bank, Kotak and ICICI Bank. With campaigns like Bachat mera adhikar', Subhiksha is all set to convert the local kirana store customer into a Subhiksha customer and this will be the case for any new entrants as well, as they will all together give stiff competition to our local grocer. Mishra is of the opinion, Whether we like it or not, local kirana will be affected, probably they will become more customer oriented. Already in Mumbai you see examples of local kiranas doing up their stores and fixing air conditioners. So several will transform and survive and many will probably shut shop. Those that are successful will drive their business through better knowledge of customers and a more personalized service. For example, they will bundle their home deliveries with products they do not sell at all. So when you order groceries, you can also order food, or medicines, etc that they will buy and send to your home. May be several such stores in a locality will collaborate to cut delivery costs and capture customers. My belief is that they will also differentiate on quality on specific products with some smart sourcing, so consumers might go to specific stores, if they want better rice or atta. Sharing his views, Takle adds, Local kirana stores will continue to be major players. Formats like Big Bazaar are visited once in a week or fortnight, whereas the kirana is still the place to go on a daily basis.

Subhiksha plans 150 consumer durable stores by mid-09 9 Sep, 2008 Refuting the media reports regarding the dilution of its stake and that of its vendors stopping the supply of vegetables and FMCG products to them, R Subramanian, managing director,

Subhiksha Trading services, said that Subhiksha Retail is all set to make an entry into consumer durables segment soon. Announcing this plan, Subramanian told reporters, We are planning to enter the consumer durables segment and will diversify our business. As per plans, we will invest around Rs 600 crore for opening 150 stores by mid-2009. The consumer durables stores would be located across 65 cities including metros and tier I and II cities and will cover a total space of around 20 lakh square feet, added Subramanian. Moreover, according to Subramanian, the company also plans to increase the number of its supermarket stores to 2,200, up from its current 1,580 mark and will invest around Rs 400 crore for this project. However, he did not mention anything about the expected turnover of the chain from this project.

Rs 500 crore IPO from Subhiksha 9 Feb, 2008 In defiance of a market crisis, wherein many majors are withdrawing their initial public offers, Chennai-based retailer Subhiksha is determined to float the Rs 500-crore IPO in the first quarter of FY 2008-09. Confirming the news to Indiaretailing, R Subramanian, founder and CEO, Subhiksha, said, We have expansions lined up and shall definitely go public in the first quarter of this financial year. Asked if the company will reconsider its plans because of the present market scene, he said: By the time we float the IPO, we hope the market will be better. We are confident that the retail investor will come forward and, to be sure, we expect good results. The company plans to open 2,000 stores by the end of FY09, and will require around Rs 1,000 crore to invest for the same. While it expects to pull in Rs 500 crore through the IPO, the remaining investment would be met by the company,

say industry sources. It is being assumed that ICICI Prudential Assessment Management Company has also evinced interest in investing in Subhikshas pre-IPO. Ranjan Kaplish

Subhiksha sells 10 pc stakes at Rs 230 cr 5 Sep, 2008 Wipro Technologies chairman Azim Premji has invested around Rs 230 crore through his private investment firm Zest Investment Pvt Ltd to acquire a 10 per cent stake in one of Indias largest supermarket, medicine and telecom retail chain - Subhiksha. Confirming the news, R Subramanian, managing director, Subhiksha said, This is in sync with the companys plan of making Subhiksha a USD 5-billion company and the countrys largest retailer by 2011. This 10 per cent stake is part of ICICI Ventures 33 per cent stake in the retailer, which has come down to 23 per cent after the deal. Subhiksha currently operates around 1, 590 stores across the country and also plans to enter the consumer durable segment within the next few months.

The next big thing for corporate retailers For a retailer, it's all about what's good at the moment, to kickstart the retail game with. So, what is good at the moment? Mobile phones, it seems. Vishnu Rageev R rings up a few debutants and visionaries in the steaming Indian mobile market.

Story begins Chennai-based discount retail chain Subhiksha, currently the largest retailer in the country with 780 stores across nine states, recently pledged to be the largest national retail chain for mobile phones. Last week, pouring more fuel into this mobile retailathon, Pantaloon Retail (I) Ltd signed a joint venture agreement with Axiom Telecom of the United Arab Emirates (UAE) to distribute mobile handsets. According to industry sources, many corporate retailers will soon emerge to grab a pie from the Indian mobile market, which is worth over Rs 20,000 crore. The mobile market, which is currently worth over Rs 20,000 crore, has been witnessing a 20 per cent year-on-year growth since 2004. It is expected to take a major plunge now with the major corporate houses going after the device to bring it on to an organised retail platform, an industry expert told Indiaretailing. Mobile mania Chennai-based Subhiksha made the first-of-its kind retail attempt in New Delhi in July 2006. Today, mobile mania rules this grocery retailer. The chain has scaled up to 145 exclusive Subhiksha Mobile stores in the capital and other states such as Punjab and Gujarat, and cities like Mumbai and Chennai. The company has opened 15 such EBOs in Chennai and plans to raise the number of stores to 30 by this December, and around 400 across the country by March 2008. When enquired about the viability of mobile phone retailing, a Subhiksha spokesperson informed: This is a new format that our managing director R Subramaniam has evolved under Subhiksha, and it is growing at an unprecedented rate. As per our data, our chain sold 65,000 mobile phones in the month of June. This underlines the viability of this device and we will close our eyes to bet on mobile retailing. According to him, the June transaction is the highest sale through a mobile chain in the country. In six months, Subhiksha expects to push through a sale of at least two lakh mobiles a month. Subhiksha stores retail all the major brands of cell phones, spanning a broad price band and selling for at least 5 per cent cheaper than other stores. Earlier, there had been no organised retail chain in the business. It's a low-margin business, but we noticed synergy with the rest of our business, which is mostly in branded goods, informed Subramaniam.

Visionary's vision Quite often, retail experts are heard saying that nobody foresaw retail as Kishore Biyani did. After signing the JV with Axiom Telecom, Kishore Biyani said: The current explosion of the telecom retail market that we are seeing, is breaking new barriers everyday. There is no doubt that mobiles will soon be the single-largest electronic products retailed in the country. Future Group, with the knowledge and expertise of Axiom Telecom's systems and process in this area, will be best positioned to retail and service the Indian telecom market. The 50:50 JV, with an equity base of up to $40 million, will distribute mobile handsets and accessories, and set up service centres in India. The venture is targeting revenues to the tune of $200 million in the first year of operations, as it taps the world's fastest-growing mobile services market. The joint venture activities will be carried out by a separate company. The new company will focus on developing backend sourcing infrastructure for Pantaloon Retail's existing telecom retailing business, to enable it to expand and scale up exponentially. Additionally, it will also create a nationwide network of state-of-the-art after-sales service centres for mobile handsets in the country, a company spokesperson informed. However, Biyani does not intend to experiment by launching company-owned private labels in mobile category due to the price fall. We cannot do private labels, but there is an opportunity at the top end for some lifestyle phone offerings, Biyani said. The Pantaloon-Axiom JV stable may even offer accessorised or custom-made cell phonesones studded with Swarovski diamonds, for instance. Pantaloon already has a Rs 500-crore mobile retail business through ConvergeM, a wholly owned subsidiary of Pantaloon Retail India Ltd. The company has a three-pronged strategy M Bazaar (shop-in-shop at Big Bazaar stores), M Port (independent brand stores), and Gen M (kiosks in malls and multiplexes catering to impulse buying).

With this joint venture, Pantaloon is leveraging its already established presence in the retail space. This is a strategic business decision for Future Group and reinforces its commitment to be a serious player in the telecom wholesale, retail and after-sales

service market in the country, avers an industry expert. Pantaloon entered the mobile-phone retailing business in 2006. Future Group with its wide presence and Axiom Telecom with its knowledge and expertise will be best positioned to retail and service the Indian telecom market. However, the company will have to deal with the short-interest span in new cell phone models and the competition from established chains like VirginEssar's Mobile Store and Subhiksha Mobile. Last year, Essar Telecom Retail entered into an agreement with the UK-based Virgin Group for brand licensing, technical and consultancy services for its mobile-phone retail chain. It is learnt that the group has earmarked around Rs 1,500 crore for its new multi-branded telecom retail chain initiative over the next five years. The company plans to set up a chain of 2,500 outlets across 600 cities in the next three years. It recently tied up with Planet M to open The Mobile Store, a one-stop mobile solution retail chain, at Planet M outlets. Winners Nokia has teamed up with Srishti School of Art, Design and Technology in Bangalore to open its first studio in India . According to sources, the partnership is the first in a series planned to tap into the potential of countries, which are seen as design hotspots and best markets for the brand. According to a Nokia official, About 66.7 million mobile phones were sold in the country in 2006, the third largest in the world after the United States and China in terms of handsets sold. Out of the total, five per cent goes in organised trade. We are happy to see many organised retailers entering the market investing millions of dollars. It is learnt that this is another reason for the company to set up its design studio, which is mainly focused at studying what Indian consumers require. Whatever the stakes for the early entrants and the newcomers, the fight for the big pie will once again prove that the customer is king.

Coca-Cola Golden Spoon Awards presented at Food Forum India 6 May, 2008

To acknowledge the vision and the efforts of the food-and-beverage retailers in India, Coca-Cola India in association with Images Group presented Coca-Cola Golden Spoon Awards 2008 Images awards for excellence in food retailing, at Food Forum India (FFI), the two-day event being hosted at the Renaissance in Mumbai. The first-of-its-kind Coca-Cola Golden Spoon Awards 2008 have in reserve a Golden Spoon Award for the most admired names in the industry. The awards were presented across the following categories:

MOST ADMIRED F&B RETAILER OF THE YEAR: QSR INDIAN ORIGIN HALDIRAMS NIRULAS YO! CHINA (winner) KAMATS MOST ADMIRED F&B RETAILER OF THE YEAR: FOREIGN ORIGIN DOMINOS MCDONALDS (winner) PIZZA HUT KFC SUBWAY MOST ADMIRED F&B RETAILER OF THE YEAR: CAFES & JUICE BARS BARISTA CAF COFFEE DAY (winner) BASKIN ROBBINS MOCHA COSTA COFFEE

MOST ADMIRED F&B RETAILER OF THE YEAR: DINE-IN INDIAN ORIGIN COPPER CHIMNEY

SARVANA BHAWAN MAINLAND CHINA (winner) MOTI MAHAL SAGAR RATNA

MOST ADMIRED F&G RETAILER OF THE YEAR: CONVENIENCE/ EXPRESS FORMATS SUBHIKSHA SPENCERS DAILY RELIANCE FRESH (winner) MORE IN & OUT HP SPEED MART

MOST ADMIRED F&G RETAILER OF THE YEAR: SUPERMARKETS FOOD BAZAAR (winner) SPENCERS SUPER RELIANCE SUPER MORE MOST ADMIRED F&G RETAILER OF THE YEAR: HYPERMARKETS HYPERCITY VISHAL MEGAMART BIG BAZAAR (winner) SPENCERS HYPER RELIANCE MART MORE MEGA STORE SPAR MOST ADMIRED F&G RETAILER OF THE YEAR: PRIVATE LABEL SPENCERS MORE (winner) FOOD BAZAAR SUBHIKSHA RELIANCE

MOST ADMIRED RETAILER OF THE YEAR: DYNAMIC GROWTH IN NETWORK EXPANSION ACROSS FOOD, BEVERAGES & GROCERY RELIANCE RETAIL SUBHIKSHA FUTURE GROUP (winner) ADITYA BIRLA RETAIL SPENCERS RETAIL

MOST ADMIRED F&G RETAILER OF THE YEAR: REGIONAL PLAYER SPINACH (winner) BIG APPLE HERITAGE FOODS @ NILGIRIS 6TEN FOODWORLD MOST ADMIRED F&G RETAILER OF THE YEAR: CONSUMERS CHOICE SPENCERS VISHAL MEGAMART BIG BAZAAR (winner) SUBHIKSHA RELIANCE FRESH MOST ADMIRED FOOD PROFESSIONAL OF THE YEAR: FOOD & GROCERY ANDREW LEVERMORE SADHASHIV NAIK RAGHU PILLAI R SUBRAMANIAN SUMANTRA BANERJEE GUNENDER KAPUR (winner) MOST ADMIRED FOOD PROFESSIONAL OF THE YEAR: F&B SERVICES PARTHA DATTAGUPTA

VIKRAM BAKSHI (winner) SANJIV KAPOOR SUNIL KAPOOR ANJAN CHATTERJEE ASHISH KAPUR NIREN CHAUDHARY MOST ADMIRED F&G RETAIL VISIONARY OF THE YEAR KISHORE BIYANI MOST ADMIRED F&G RETAILER OF THE YEAR: LANDMARK CONCEPT CREATION & EXECUTION HYPERCITY

The awards are a part of Food Forum India, arguably the countrys largest congregation of global and Indian food retailers, manufacturers, organisations and minds in the food-and-beverage businesses. Food Forum India as a concept was launched by Subodh Kant Sahai, minister of food processing industries, government of India. Flagging off the awards ceremony, Sahai said, We are learning from the private retail players and trying to bring about an investment-friendly policy for you. I congratulate all the participants and the organisers for taking the interest and initiative in organising the Food Forum on such a huge scale. I also request the food-and-grocery retailers to work on something so that the farmers can be a part of the development of the sector. Growing demand from the retailers will lead the farmers to perform better. The retail sector players are the new leaders of the farming community. The Coca-Cola Golden Spoon Awards 2008 were decided on the basis of a comprehensive analysis of: Voting from consumers through a pan-India survey in six leading metros and tier I cities Voting from leading industry experts in the field of food-and-beverage and food-and-grocery retailing Self-nominations by various players which included information on key variables such as retail presence in terms of number of outlets/geographic

coverage, operational retail space, turnover, growth in the last one year, new formats introduced, new marketing initiatives, and communication Final jury voting comprising global consulting firms and leading industry observers and analysts

Experience vs Convenience, as the retail mle goes By Ranjan Kaplish and Satrajit Sen Are you still to visit the new shop in the neighbourhood? Well, if yes, you missed out on those neat shelves, creative displays, aisle spaces, bar-coded products, hoards of brands, the greetings extended by the staff, their billing technology in all, you missed out on an ultimate experience. What! You went to buy eggs in that new shop? You burnt extra fuel, wasted time waiting for them to scan and bill, and paid extra for packed, branded eggs. Held yourself from impulse buying? Is itconvenient? This is India(ns) talking. Where, once upon a time, anything to everything could, would, and had to be bought from the nearest kirana shop (mom-and-pop store) the same shop wherefrom our grandfathers went to buy from perhaps the present owners grandfather. That was a decade or two ago. This is 2008, and we are talking about a India where almost everyday, at some nook or corner, a unique shop opens to sell this or that retail revolution, as they call it Although not important enough like the revolutions described in the history texts, this definitely has made a difference; the good or the bad of it remains subjective. . The business of buying, selling and buying, with its tremendous growth potential, has attracted not only the national corporate giants, but also the multinational behemoths. From Ambanis and Biyanis to Tatas and Godrejs, to

Mittals and Jindals enterprising Indian industrialists are busy opening jazzy shops, and are heard chanting the charming retail mantra, my customer is my king, which most of us must have seen written somewhere at a grocery shop near home. Indiaretailing assessed: Miles to go before anybody slips! Crying, but hopeful Blank, but with ideas Troubled, but confident Discouraged, but preparing Whatever is being heard or witnessed about the state of the small retailers in the country, the opposite of that is equally true. Since November 2007, team Indiaretailing has been visiting, talking to, and analysing the so-called probable victims of corporate Indias entry into the business of retail. The reconnaissance was focused on a random selection of localities in the south of Delhi. Scattered grocers, chemists or pharmacists, vegetable vendors, merchants of apparel, furniture, electronics, or hardware almost all sorts of independent retailers everyone was quizzed to share their views on expected/happening effects on their business and their counter-insurgency plans. Surprise! The ones who we had assumed are bound to be pushed into a corner by the recent upsurge, are oiling their guns and have started assessing their ammunition. We have our own strengths and advantages that the Wal-Marts or the Carrefours of the world dont, and that is what we will cash in on, said a small grocer, operating adjacent to the newly opened Subhiksha, in one of Delhis happening marketplaces. As of now, the corporate giants have not affected my business, though the future may be another story. We understand the difference that we can make, and also know what we must learn from the big entrants, he added. He is not the only one; there are many of his kind and with similar voices. Fortis Healthworld has limited stock. Many customers come to my shop looking for products that he couldnt get there. I have gained new customers. Moreover, the person manning their counter is not an educated pharmacist, whereas I am. I know the alternatives for the prescribed medicines. There are

unlimited advantages that we have, and we dont have to pay heavy rent like them for our shop, said Rajinder Arora, owner of Ashirwad Chemists. Ashirwad Chemists and Fortis Healthworld, ironically, share the same wall that partitions their stores in GK-II market in south Delhi. As luck would have it, Lifeline, the pharmacy chain, recently closed shop in the same area. Vinod Dubey, the proprietor of Sanjay Stores, a kirana store very near to the Subhiksha outlet in East of Kailash, south Delhi, says, Our sales are the same. We have our own loyal customers who wont change their preferences. We understand their needs. So, we dont need to worry about anything. Furniture retailer Jagdish Kalra, selling besides a Featherlite showroom in CR Park, south Delhi, says, Featherlites stock is limited and their store is comparatively small, whereas we sell all the necessary items. There is no question of losing customers. Moreover, we have been here for two decades now, and have closely monitored the developments and know the markets requirements. A vegetable vendor selling in GK-II since the last 30 years has his own reasons to smile about. Although initially people did buy vegetables from these big shops, they had to come back, and I was confident that they would. This vendor commutes around 35 kilometres everyday, to be present in the wholesalers mandi at 4 am in the morning, so that he can get the freshest lot of vegetables and fruits. Do you think the agents hired by these biggies can match my efforts and products? I even sell these exotic vegetables, be it red or yellow capsicums, dried mushrooms, or broccoli; I know what is in demand and where to buy the best product from. A tough one to compete with, isnt he?

Flip side Its not just one, two, or three, but hundreds (sample good enough to represent thousands),

who are echoing similar opinions. Yet, there are several others who look at the situation with a divergent worldview. While one set is confident and preparing, there is another that is insecure, and not able to visualise many opportunities in the near future. Kishan Garg, the proprietor of Garg Stores, a small grocery shop (adjacent to our confident subziwala), has seen a fall of over 20 per cent in his business after Subhiksha and Sabka Bazaar opened in the vicinity. There are obviously a limited number of customers for any market, and we have lost 15 to 20 per cent of our regular customers due to the new openings. This is a big loss for us. The statement was echoed by the proprietor of Vardhaman Stores, another kirana store in the same area. Surinder Lal, a vegetable vendor near a Safal outlet in Sriniwaspuri, complains, People prefer to go to them as their looks and presentation are good. We sell it in the open, and that is what perhaps makes the difference. After all, we also have the same varieties as they have. They (the organised chains) have money to spend on mounting their looks. We cant even think of this, as we literally struggle to make the ends meet, says Ahuja, the owner of Parkash Stores in Nizamuddin. Sarwan Narang, the owner of Narang Stores, a small grocery shop at Sant Nagar, also voiced the same sentiment. However, none of these affected ones had a good-enough reason to answer some queries they must necessarily direct at themselves. For example, why is that those who come to your shop, actually come? Why not all of our customers go to the new superstore? And, what makes me different from them even while selling the same products? Counter-insurgency As a prominent telecom operators tagline goes, An idea can change your life The new improved looks of our store have helped us gain more customers. We have also introduced some additional features such as baskets for the shoppers. Our motive is to facilitate our customers as much as is possible and, thus, grow our relations with them, says S Ahuja of Ahuja Daily Corner, a small foodand-grocery shop at Sriniwaspuri. We have widened our window space so that we can showcase each variety of our products, said Rakesh Luthra, the proprietor of Lokesh ki Dukaan, also at Sriniwaspuri.

Super Priority Corner at Khan Market has appointed a gatekeeper who, as is the custom at other biggies, greets and opens the stores doors for everyone. Kishan Lall and Sons, a grocery and FMCG store at East of Kailash, is planning to open a chain of stores in the market in the Kailash Hills residential area. This endeavour, according to the owner, is to facilitate their customers residing in that particular area. We have a number of customers coming in from that area. With the opening of the new store, they will get their necessities more conveniently and wont have to come down to East of Kailash, reasons Prasan, the proprietor. Apart from grocery, we will soon bring in vegetables and fruits for our customers, said MK Khurana, the owner of Fancy Stores in East of Kailash. The government has no plans for supporting us and, hence, we have to utilise whatever resources we have to improve our outlook and reach, says Gyanesh, the owner of a small food and grocery store in Lajpat Nagar. So many of them, doing so many things with so many ideas, all to retain their present faithfuls and attract more they are all of them going to play out their roles in determining the future of retailing in India. Kings speak: Comfort, value, experience, convenience According to Technopak's Consumer Trends '06-07, 93 per cent of households across India prefer the local kirana store for staple food and vegetables. Technopak's Consumer Trends '06-07 further reads that 66 per cent of the customers want to travel a distance of less than 200 metres to 1 kilometre for their shopping needs. The added displays at our local kirana store help us to remember the things we need to buy. Mostly, I dont have to come down with a prepared list now, says Shalini Ahuja, a doctor. The media in our country is always on the run to create hypes. I dont think the new big shops can offer what our own kiranawala provides, said Sohini Mishra, a housewife. I am quite satisfied with my shop and do not really look forward to change it. We have been buying from this store for years now. I cant just break the relationship, she added with a somewhat sentimental undertone. I always get discounts and credits at a mom-and-pop store. Any day, even if I am out of cash, they give me the things I need. This is not possible in a mall or at a branded retail outlet, says Zaheer Ali, a call centre employee.

Who wants to spend money on travelling when you can get the same thing across the street, exclaims Lalita Nikumbh, a housewife who stays in Lajpat Nagar. Manish Luthra, an engineer, says, The home delivery system of a local kiranawala helps me to place the order on my way to office, and they deliver it to my home. Its so easy. Dinesh Singh, a graphic designer residing in Lajpat Nagar, is grateful that one doesnt even need to visit the store to buy necessities. I just call up the local kirana store and order the product. They come and deliver it at my home. The ones doing the talking here are apparently not switching loyalties all too soon. Experts speak According to India Retail Report 2007, organised retail presently comprises 4.7 per cent of the overall retail market, and was expected to grow by 34.8 per cent by 2006-07. Even as more and more players enter the organised business, it is perhaps a good time to pose this question: Can mom-and-pop stores or other old, independent retailers, should they organise themselves, be counted as part of the expected organised retail figure? The subject sounds strange, being unheard or less talked-about. Will researchers or those analysing the organised retail scene validate the ones who will organise themselves in the coming years? If an ancient marketplace starts providing services and experiences better than a branded multi-brand outlet, will its participants be considered among the organised retailers? While these queries will be answered in due course, some experts from various sects of retail, share ideas that can strengthen the model of small independent retailers. Arvind Singhal, chairman, Technopak Advisors My advice to the independent retailers (I would not call them unorganised or traditional anymore, since many of them are modernising and trying to reinvent themselves) is:

1. Be confident about their relevance (specialisation) and strengths (proximity to the customers, knowledge of customers) in Indias context, independent retailers are going to stay for many decades to come, and will play a very important role in the overall retail ecosystem 2. Renovate their outlets to make them look fresher, cleaner, brighter, and, in general, more contemporary and less cluttered from inside, and appealing from outside (this can be done on low budget, too) 3. Wherever possible, invest in making customer-friendly shelving and displays so that customers can walk around, touch and feel the product, and wherever desired, can self-serve 4. Invest in basic electronic point-of-sale system, which can generate elementary retail business performance reports for them (to facilitate category management, brand/SKU management, etc.) 5. Further, strengthen customer contact/relationship by trying to learn and remember customer names and preferences (a computer-based system will help a lot), and stay in communication with them, whether they are in the store or at their homes Jayant Kochar, managing director, Go Fish Retail Solutions 1) Choose your playing field: You cannot compete against large-scale retailers on their terms, or against their strengths. At the same time, they can't compete with you on yours. Understand what it is that your customers want from you. This is not easy, because very often, the reasons they give for shopping at a particular store may be different from the actual reasons. But once you figure out what they really want, you will find it relatively easy to give it to them. So, forget about asking for level-playing fields find the one that suits you. Choosing the right playing field usually involves competing in an area where you have a unique competitive advantage and it must be one that is relevant to your customers. Contrary to popular belief, in the case of small local retailers, it is not necessarily price. 2) Focus on the top-line: Most small retailers tend to focus too much on the bottom-line, and are obsessed with controlling costs. When I say they should focus on the top-line, it is not to say that it is not important to improve efficiencies and control costs. However, the fact is that their costs are probably going to remain within acceptable limits just by virtue of their close personal involvement and control. What they need to think about is out-of-the-box ways

to increase sales, by grabbing every viable opportunity to satisfy the latent needs and wants of their customers. One of our clients is a small pharmacy chain. Their strategy was to improve viability by cutting costs. We found that their costs were 7 per cent below other pharmacy chains but their sales per square foot were 23 per cent lower! With some selective loosening of the purse strings, their sales are already up to competitive levels. 3) Surprise them: The aim is obviously to delight your customers so that they want to come back again and again. We have found that when retailers think of how to delight their customers, they usually end up going in for expensive promotions and gimmicks, which may be counter-productive; or they go in for the same things that all the stores around them are doing. Think, instead, of what you can do that will pleasantly surprise them this is the best way to create real delight that will lead to more frequent visits and higher sales. Jayant Kochar is managing director of Go Fish - India's leading retail consultancy, and he can be reached at jayant@gofishindia.com Dharmendra Kumar, director, FDI Watch in Retail. 1. Form cooperatives: The small and independent retailers can easily outnumber the countable companies in the business. They should club together and form cooperatives; together they can become one company, through which they can form a model that can compete. 2. Stay united: Scattered we fall; so we must stay united and plan together to fight competition.

IRIS idea: Challenge the fear Images Retail Intelligence Service (IRIS) conducted an exhaustive research to understand the impact of modern retailing on traditional retailers and consumers. A primary conclusion of the research was that challenging the fear is the need of the hour. The key highlights of the research include: 1. There is clearly a mixed feeling amongst traditional outlets in this new environment of development of modern outlets. Interestingly, the apprehension

levels are high in Kolkata and very low in Bengaluru, with Mumbai and NCR somewhere in-between. 2. Also, the apprehensions are more amongst the smaller outlets and in outlets in residential areas; signifying that the larger traditional outlets in commercial areas have adapted a lot more to the advent of modern retail. The possible directions the study leaves one with are: 1.Like our father of the nation Mahatma Gandhi said, customer is the most important If we are to keep the interests of customers paramount, then the task is to help the small traditional retailers on various retail mix aspects such as supply chain, store design, marketing and merchandise assortments. 2. There is possibly a need for modern retailers to use and look at promotions much more strategically, which would go a long way in easing whatever apprehensions exist 3. The growth in consumption is encouraging for both modern and traditional retailers, and, thus, we need to be poised with better-planned merchandise assortments.

Budget 2008: Retailers left asking 1 Mar, 2008 Our demands have not been addressed, as they should have been, chorused the retail fraternity of India while sharing their take on Budget 2008 with Indiaretailing. Future Group: Kishore Biyani, CEO, Future Group, says that if farmers and income tax payers are considered to be the two major interest groups in the country, this budget couldnt have been any better. The government has waived off more than Rs 60,000 crore in rural loans and, in addition, announced enhanced spending for the rural economy. In addition, there is a decrease in CENVAT, central sales tax and excise duty on certain products. Biyani said, "As a retailer, we can hope to capture some part of the additional consumption that will generate from these measures.

"Our country is going through an unprecedented phase of growth and this was the time to make long-term decisions on how to sustain this rate of growth. But surprisingly enough, this budget does little about envisioning long-term growth plan for the economy and for various industries. While immediate benefits are clearly visible in the budget, one finds it hard to find long-term measures for new-economy businesses that are gaining momentum." Shoppers Stop: Govind Shrikhande, chief executive, Shoppers Stop, said, Issues like service tax on rentals and industry status have not been touched, but the finance minister has done well to address issues including CST and excise duty on certain items which, in the long run, will benefit the retailers. In all, it is a neutral budget." Aditya Birla Group: Vikram Rao, business head, textiles and apparel, Aditya Birla Group, said, "Although the budget has received a positive response in a few sectors, on the textile export front, the budget is a little disappointing. The budget will dampen the exporters bottom-line as the finance minister did not announce anything to check the adverse impact of rupee appreciation. On the domestic front, the reduction in service tax on rentals in retail would have been a welcome move," he added. M&B Footwear: Inder Dev Singh Musafir, director, M&B Footwear, also expressed his discomfort on the Budget, saying, The finance minister has once again lost an opportunity to boost an industry that provides employment to the weaker section of the Indian population the aam aadmi. By rationalising taxation on footwear, he could have helped in converting 80 per cent of the unorganised footwear industry into a tax-paying community, and, in turn, given a boost to tax collection." Subhiksha: R Subramanian, managing director, Subhiksha Trading Services, termed the Budget as the governments election propaganda:

 Rs 60,000 crore debt waiver for farmers and tax relief for almost all individuals no increase in duties and taxes cheaper small cars and scooters and cornflakes no increase in petrol prices what more could one expect as handouts No shocks from new fringe benefit tax (FBT) charges Disappointment would be that there is no acceleration in timetable on CST reduction. Neither is there any speeding up of the goods and services tax regime The concerns are that there is no stimulus to investment, and besides the increase in capital gains tax, a one per cent add-on duty has been imposed on mobile phones Concerns about keeping Indias growth intact in a globally tough economy have not been addressed Overall, a budget that does not rock the boat we expect it to be positive for retail, given more money in consumers' hands and, therefore, more spending Vishal Retail: Surinder Aggarwal, managing director, Vishal Retail, said, We are somewhat happy, but the minister could have thought about minimising the service tax on rentals. This perhaps is the only major issue he has lost. Otherwise, we should congratulate him for coming up with a consumer-friendly budget. Big Apple: It is quite a good budget, but the finance minister should have addressed the service tax issue. Otherwise, it is more or less satisfactory to note that he has touched the issues of FMCG and other consumer goods, said, Munish Hemrajani, managing director, Big Apple. Ebony: Lalit Kumar, chief executive officer, Ebony, said, It has been a good budget from the consumers point of view, but as an industry person, I am not happy. Our major demands have not been addressed."

Nirulas: Samir Kuckreja, chief executive officer and managing director, Nirulas , pointed out: We are happy with the reduction in CENVAT from 16 per cent to 14 per cent, though we were hoping this would be removed for confectionary items Reduction in excise on packaging will lead to a direct benefit Focus on the cold chain and cheaper refrigeration components will help develop this critical infrastructure for our industry The reduction in CST is welcome, but we were hoping that it would be removed The tax holiday to hotels in heritage sites will help develop tourism in these areas Overall, it is a balanced and growth-oriented budget with benefits for different sections of society GHCL: Nikhil Sen, head, strategy and international business, GHCL, said: "We are happy as the prevailing difficulties due to rupee appreciation have been addressed. The finance minister seems to have understood the importance of creating price stability. We are also happy to know that the government is concerned and will help in infrastructure development in the country. "However, the ministry has missed out on several major issues that have annoyed the retail fraternity," he added

Ranjan Kaplish and Satrajit Sen

Future eyes Rs 12,000 cr from private labels 16 Sep, 2008 Kishore Biyani-led Future Group is eyeing around Rs 12,000 crore from the private labels by 2012.

Speaking to media on the occasion of India Retail Forum 2008 in Mumbai, Biyani expressed his hopes saying that brands are created by the image what we call as brand image and if the demand and the need of the consumers are taken care of, then any brand can become the favourite brand to the consumers. That is why Future Group is currently engaged into researching and innovating private brands for its customers. He also said, Future Group is eyeing for a 50 per cent stand-alone stores in near future. According to Biyani, as long as Indian retail market is concerned, one should look into the expansion in terms of the number of stores to reach more and more people and not to the formats. So, Future Group would be looking into opening more and more stores in near future in any format. According to him, presently the retailers are too much into researching about the formats of the stores avoiding the needs and demands of the people. It is also the rural retailing in every format that the group has in its radar starting from opening grocery stores to providing insurance to the farmers to reach more and more people. The group is eying for as many as 170 to180 Aadhar stores in the next 12 to14 months as part of its expansion plan. But the group is not at all eying to the Cash-and-Carry formats as of now. Future eyes to giving more and more to the consumers according to their demand and needs. He further informed that the Group has done extended market research on understanding the Indian markets and consumers for the past one year with the Mckensey Group and now planning to come up in a re-invented way. The group is also eyeing for a strict restriction in making expenditure, which results into saving around Rs165 crore in the last year by the group. This saving has also been included in the groups future planning. Kishore Biyani, however, negated the news that Future Group is eyeing to buy stake in Subhiksha.